Patel Retail Greenlit for IPO: SEBI Approves ₹10 Face Value Share Issue as Promoters Cash In

Supermarket chain Patel Retail has received approval from the Securities and Exchange Board of India (SEBI) to launch an initial public offering (IPO). The IPO will include a fresh issue of up to 90.18 lakh shares, each with a face value of ₹10. Additionally, the company’s promoters will offer 10.02 lakh shares for sale.

Details of the Offer

The promoters involved in the sale include Dhanji Raghavji Patel, who will sell 7.68 lakh shares, and Bechar Raghavji Patel, who will offload 2.34 lakh shares. A portion of the shares will be reserved for employees.

Patel Retail has also mentioned the possibility of a pre-IPO placement of up to 5 lakh shares, which could reduce the size of the fresh issue if completed. The IPO will be conducted through a book-building process, with 50% of the shares allocated to qualified institutional buyers, 15% to non-institutional investors, and 35% to retail investors.

Use of Funds

The company plans to use the funds raised from the fresh issue to repay certain borrowings, fund working capital needs, and for general corporate purposes. Specifically, ₹60 crore will be used for debt repayment, and ₹115 crore will be allocated to working capital.

Company Background

Patel Retail was founded in 2008, with its first store opening in Ambernath, Maharashtra. The company has since expanded to the suburban areas of Thane and Raigad, operating 31 stores with a total retail area of approximately 1,26,000 square feet. Patel Retail offers products across 38 categories, including food, FMCG, general merchandise, and apparel.

Private Labels and Expansion

To improve margins and strengthen its brand, Patel Retail has introduced private-label products like “Patel Fresh” pulses and “Indian Chaska” spices, which are processed and packaged at the company’s facility in Ambernath. The company has grown to become a significant player in the value retail sector and aims to expand its store network in the Mumbai Metropolitan Region and other suburban areas.

In addition to supermarkets, Patel Retail operates two exclusive ready-made garment outlets under the brand “R Choice” and is involved in the export trading of agricultural commodities and other products.

Financial Performance

In the fiscal year 2023, Patel Retail’s revenue from operations increased by 32.94% to ₹1,018.55 crore, with profit after tax rising by 44.06% to ₹16.38 crore.